Business Marketing
Four basic categories define the business market:
1. The commercial market
2. Trade industries
3. Government organizations
4. Institutions
Commercial markets include individuals and firms that acquire goods and services to support, directly or indirectly, production of other goods and services.
Example:
When Lufthansa buys aircraft built by the European consortium Airbus Industry, when Sara Lee purchases wheat to mill into flour for an ingredient in its cakes.
Trade industries include retailers or whole sellers that purchase products for resale to others.
Example: retail meat markets may carry out bulk purchases of sides of beef and then cut individual pieces for their customers.
Institutions include a wide range of organizations, such as hospitals, churches, nursing homes, colleges and universities, museums and not-for-profit organizations.
Example: state universities.
Government organizations include domestic units of government- federal, state, and local as well as foreign governments.
Example: national defense or pollution control.
Q2. What are the characteristics of the commercial market? Show how each characteristic affects the marketing strategies of firms serving that market.
The commercial market is the largest segment of the business market. It includes all individuals and firms that acquire goods and services to supports directly or indirectly, production of other goods and services.
Some products aid in producing another good or service. Others are physically used up in the production of a good or service. Still others contribute to the firms day to day operations.
Q3. What are the SIC codes? How do the marketers use these codes?
Standard Industries Classification codes are the US government classification system that subsides the business market place into detailed market segments. Businesses use SIC code data for more then segmentation. These codes also help them to estimate the demand and forecast sales.
Q4. Contrast organizational buying behavior and consumer purchasing behavior. What are the primary differences and similarities?
Business buying behavior takes place with in a formal organization with its budget, costs and profit considerations. The primary differences include excessive organizational steps, considering budget, costs, prioritizing techniques for purchase decision analyses.
Where as, consumer-purchasing behavior includes knowledge of business buying situations and is influenced by peers and ads.
Q5. Give examples of the effect of industrial market demand of derived demand, volatile demand, joint demand, inventory adjustments, and the accelerator principal.
Derived demand:
Demand for a business product that results from demand for a consumer product of which it is a component. Example:
The growing global demand by food service firms for packs of Heinz ketchup, mustard, mayo, etc. is all driven by consumer’s appetite for their convenience and joy of dining out.
Precise and comprehensive information is the basis of all successful commerce activity because it provides a vast amount of information about possible customers, existing ones and the firm’s competition. Market research allows business proprietors to establish the viability of a business venture before committing sizeable resources.
The availability of the supply itself could impact the demand as well. Since Primark sells by volume and sells standardized models and uses people’s word of mouth as advertisement it is a vital feature that a model is sold in many locations, but how much Primark can supply will be dependent on extra factors as well. The following examples are related to supply factors which may in turn influence demand.
The organizations that dominate our society are known as formal organizations. Businesses, schools (colleges and universities, corporations, governments, churches and other religious institutions all fall under the category of a formal organization. Basically any institution you come into contact with on a daily basis. The harsh reality is that every person in this world, your friends, family, professors, bosses, especially you are a member of an organization; possibly several. And each of us contributes to the organization in our own way whether we want to or don’t.
Although the goal of B2B marketing is to convert prospects into customers, the process is longer and more involved. A B2B company needs to focus on relationship building and communication using marketing activities that generate leads that can be nurtured during the sales cycle. B2B companies use marketing to educate various players in the target audience because the decision to purchase is usually a multi-step process involving more than one person. For example, the goal of an email campaign for B2B is to drive prospects to the web to learn about your products and services.
Commercial Business Market: a growing trend of customers, this group was composed of local market customers as well as a few local Fortune 500 companies. This group of customers was a fast growing trend for Kinko’s since little competition was growing in that segment; for which Kinko’s provided as outsourcing services all their business documents needs. Here is where Kinko’s finds their major new business opportunity.
It is not hard to comprehend, for instance, that what is considered "client administration" in one nation might be completely wrong or even hostile in another. Along these lines, Wal-Mart 's German rivals merrily watched Wal-Mart outrage its new clients by stowing their buys. These contenders realized that thrifty German customers incline toward this undertaking not be finished by outsiders. While more well-to-do German customers may value this "administration", German rebate customers viewed this as an interruption into their security for which they were paying a concealed work cost. Wal-Mart 's blunder was intensified by its utilization of plastic packs in a general public exceedingly touchy to issues of manageability and matters of nature. Consequently, for reasons of both security and nature, Germans will take their own expansive packs to markets to sack and convey their own buys. This illustration is illustrative of Wal-Mart 's inability to value its clients. The organization 's utilization of greeters and its business of the "ten-foot guideline" whereby representatives would offer backing to customers were counter-beneficial decisions in a markdown market environment. Numerous customers were startled by these practices. Some even felt attacked. For instance, supermarket chain, Coop, which started in Germany, is a decent case of what
From buying a hamburger to buying a house people use a process in order to make a decision on what to buy. (book cite) describes this as the consumer decision process (pg.175). Utilizing a consumer decision process model, marketers are able to better understand how consumers are purchasing products and services. The five step consumer decision process model includes need recognition, information search, alternative evaluation, purchase, and post purchase. Not all purchases require following all five steps to a T, but consumers, whether they know it or not, follow a version of this model when making a purchase. Companies also use this model in order to effectively market their products and services. A company
Consumer Decision Making Process A key factor in successfully marketing new/existing products or implementing a product Extension is a thorough understanding of the motivation, learning, memory, and decision Processes that influence consumers purchasing behavior. Consumer purchasing behavior theories have found their way into managerial decision making to help companies more effectively develop and launch new products, segment the market, determine market entrance and in brand management. Therefore, a better understanding of how consumers decide what to purchase is critical to the success of a product. There are numerous theories and models describing the consumer purchasing decision process.
Armstrong G. & Kotler P. (2007) Marketing: An Introduction 8E Upper Saddle River, NJ Pearson Prentice Hall Publishers
Coursework 1: Task: Marketing Plan for a new street wear (leisure/sports wear) manufacturer who does not wish to distribute goods via traditional retail outlets. Introduction. The purpose of this report is to develop a clearly structured and efficiently detailed plan, regarding the creation of a business producing and distributing leisure/sports wear clothes in UK. The business plan is designed to function under a focus-differentiated strategy, via internal resources. In the sense that growth will be achieved through the resources equally provided by the two owners of the business. The differentiation point of the product, as reflected by the marketing mix, will be the one emphasizing the good quality of the product and quick service of the business. In order to minimise the risks involved in such an attempt it was decided that the plan should be divided into sections. Meaning that at the very first steps of our effort we will focus on our immediate and friendly environment. In order to be able to respond to either circumstance the following plan regarding the business “Fashion Mania”, a name that can be translated to obsession for fashionable clothes, was developed. The company. “Fashion Mania” is a clothing organisation, founded in 1997 by John Williams and Malcolm Pete, two street wear manufactures who mainly designs and distributes via mail order casual clothes to serve young professionals with little free time. The business grew in 1999 with the help of a bank loan (now paid off) and “Fashion Mania” is now selling clothes via Internet and catalogues. Mission Statement. Our mission statement is to provide our customers with a selective range of high quality, well-designed and attractive clothes at reasonable prices. Market Background. When we are referring to street wear we are mainly talking about sports clothing and sports footwear. However, nowadays we observe a distinction between those two (sports clothing, sports footwear). The separation of sports clothing from sports footwear reflects the importance that sector has to the whole market. It is not very easy to segment that particular market because the delimitation between active sportswear and leisure sportswear is not clear. Some people usually wear many items of sports clothing on leisure or sports time. Whereas the sports clothing market has not seen any great changes within the last three ...
Dell, Tyson, Samsung, and watermelon farms purchase boxes to ship their products to stores and occasionally directly to consumers. Grocery stores and fast food restaurants purchase paper sacks to hold the customer’s goods. McDonalds and Starbucks acquire the coffee cups directly from the manufacturer. Cutsize paper is purchased and distributers, like Wal-Mart, Staples, and Office Max, break the pallets and sale individual reams and cartons to consumers. The vast majority of the buyers of paper are major customers, and they often prefer generic products; therefore purchasers have tremendous bargaining power. Manufacturers attempted to raise prices in the mid 2000’s, but they met with strong opposition and the efforts failed (“Paper business in mature”’, 2013). Even when manufacturers shifted modes and found methods to produce paper more cheaply by increasing productivity as much as 30%; buyers demanded, and received lower prices from the
...cular market. Companies that conduct market research normally save a lot of money by understanding what type of product or service is needed, other than entering the market blindly without knowing what to expect.
To effectively sell a product or service, organizations have to really know how customers behave, regarding to what they buy. The study
Commercialization is the process of involving an activity in commerce. Commercialization is the process that is involved in making a product commercially successful. The process involves the production, dissemination, sales, marketing and support necessary to commercialize the product or activity. Commercialization apples to various sectors and these include the education, agriculture and the sport industries.
Organizational buying behaviour can be described by using the buy-phases (Dwyer and Tanner, 2006) which helps in the explanation of the various steps that are involved in a typical organizational purchase decision making process.